New Thai PM Needs to Tackle Woes Beyond His Control: Economists

With the wait for a new leader finally over and a government set to be in place soon, Thailand’s economy is all set to receive the boost it needs to counter external headwinds.

(Bloomberg) — With the wait for a new leader finally over and a government set to be in place soon, Thailand’s economy is all set to receive the boost it needs to counter external headwinds. 

That’s the view of economists that Bloomberg surveyed after Srettha Thavisin’s election as prime minister on Wednesday. They agree that the end to the months-long political impasse will help revive public spending and support gross domestic product growth, but the new leader will have to contend with other challenges that are beyond his control.

“The election of a new PM removes one source of domestic political uncertainty,” said Krystal Tan, an economist at Australia & New Zealand Banking Group. “But even if political calm prevails, the economy faces other headwinds including a weak Chinese economic outlook and unfavorable weather.”

Here’s what economists are saying about what to expect in the coming days:

Nomura Holdings Inc.’s Charnon Boonnuch:

  • “We still maintain our cautious view on the economy, forecasting GDP growth at 2.7% in 2023, amid multiple headwinds to growth ranging from China’s slowdown, intensifying drought to budget delay”
  • Slow government formation means any stimulus package is unlikely to be implemented soon, and hence provide a limited offset to those headwinds
  • Maintains that the Bank of Thailand’s hiking cycle is already over after 175 basis-points of increases, and sees limited scope for further increase given signs of economic slowdown and a continued drop in core inflation rate

Pantheon Macroeconomics Ltd.’ Miguel Chanco:

  • “In the short run, it should help to kick start both public and private investment.” Capex hit a wall last quarter, he noted, adding that any meaningful gains are unlikely in the current quarter after having already crossed the midway of the period
  • “I doubt that any stimulus measures pursued by the incoming Pheu Thai-led government will stoke inflationary risks and prompt more BOT rate hikes. Starting points matter, and any fiscal stimulus, at this stage, will serve merely to cushion what is clearly an economic slowdown, rather than cause things to overheat”

Kiatnakin Phatra Securities’ Pipat Luengnaruemitchai:

  • “Given the structure of the coalition and the negotiation between the parties, it is unclear which policy would be pushed through. The new government would be limited by the fiscal constraints given the delay in the budget and limited fiscal space. It is really difficult to push through much higher deficits in the short term”
  • “On top of these, we are facing with limited demand pull inflation. Unless there are new supply side constraints or the new government can really implement significant deficit-financed measures, I don’t think the BOT would have a strong case to tighten much further”

Standard Chartered Bank Plc’s Tim Leelahaphan:

  • “While Pheu Thai recently pledged to implement its one-off flagship digital wallet program, which would cost about 560 billion baht ($14.3 billion), this may have to be deliberated among coalition partners and related entities before coming into effect. Other economic policies may be less of a priority at this juncture when robust private consumption may need to be sustained”
  • “The fiscal policy outlook is likely to remain unclear until early 2024 at the soonest as the budget for fiscal year 2024, starting Oct. 1, 2023, is likely to be debated in October for implementation early next year – potentially result in delayed capital expenditure for new public projects”

More stories like this are available on

©2023 Bloomberg L.P.